On June 28th, Alternate India Investment (AIF) Category-II was oversubscribed, as announced by the growth and late-stage investing firm. The fund’s limited partners (LPs) included prominent businesspeople from the technology, manufacturing, sports, and entertainment industries as well as family offices and sovereign wealth funds.

It expects to write eight to twelve $20 million to $25 million checks to invest in firms. The nine companies under Epiq Capital’s management have a combined $15 billion in valuation.

According to Rishi Navani, the VC’s founder and managing partner, the fund was raised in FY23, the most difficult year to do so in India over the past eight years.

But limited partners are convinced by the India story and the India tech story. Navani said during a news conference, “They looked at our track record of not just returns but also how our portfolio companies are performing.”

We have at least four companies that are profitable or have previously achieved profitability and are free-cash-flow positive: Lenskart, Cure.fit, Builder.AI, and Dailyhunt.

Navani has stated that within the next 18–36 months, the company will consider an IPO.

He predicted that by next year, Lenskart’s income would have reached $1 billion and that Pristyn Care’s would be close to $100 million.

Diverse portfolio 

Navani, who also co-founded Matrix Capital India with Avnish Bajaj, established Epiq Capital in 2016; the firm has already raised one fund and made nine investments.

In addition to Lenskart and Dailyhunt, the business has backed other Internet startups that have gone on to become massively successful—unicorns like Pristyn Care and Cult.fit, and soon corns like MS wipe and the education technology venture Teachmint.

The firm also invested in Nest away, a home-rental business that was recently acquired by Aurum Proptech, a publicly traded property technology firm, for a discount of 95%.

According to Navani, the VC’s funding dropped by 35% in 2022 compared to 2021, although the firm still made around double the investments it did in 2019 and 2020.

The new fund from Epiq funds contributes to the mountain of available funds in India’s venture capital industry.

Several private equity and VC companies have established sizable India-focused funds in the past 15 months. These firms include Sequoia Capital India (formerly Peak XV Partners), Accel, Matrix Partners India, Nexus Venture Partners, and Elevation Partners.

However, due to macroeconomic challenges, capital deployment has been delayed. Recent corporate governance difficulties have caused venture capital firms to be wary.

“If there are 10,000 funded startups in India, 10 I would say are having corporate governance problems,” Navani remarked in response to a Moneycontrol inquiry regarding such failures.

Perhaps one in a hundred companies has governance issues, but that’s still fewer than 1 percent. The percentage of instances involving poor governance is substantially higher in more established industries. Tech firms are more likely to uncover it due to their “active diligence process” and frequent fund-raising efforts.

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